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Opinion

White label: The fastest growing business cloud model

Why white-label partnerships make sense for IT service providers

How do I get into the cloud? With the prevalence of the cloud and the acknowledgement that organisations must evolve to remain competitive, this has become a top question for forward-thinking firms in the channel that are exploring how to grow their businesses and revenue.

There are several options, or models, that have emerged around cloud computing. Organisations that have the assets and skills might choose to build their cloud in-house and be the operators as well as sellers of their core products and/or services. Another option is for them to partner with cloud providers, and trust the providers to work directly with their customers.

But what I believe to be the fastest-growing model in the cloud services industry is that of the white label partnership. These partnerships provide a solution for organisations that want to evolve with the ever-changing IT landscape – or for companies with a traditional “on-site” focus.

As customers move forward in their cloud journey, so must their partners, and that’s where the true promise of white-label cloud exists. Following are five reasons why white label partnerships make sense for many of today’s technology service providers:

  1. Retaining customers by evolving the brand
    Established, successful service providers already have a strong customer base using their solutions and services. To keep those customers, they need to evolve their offerings as technology matures. Sometimes introducing another partner or brand may not resonate with customers. That’s when a white-label offering makes sense. Wrapping new cloud services around the business enables providers to seamlessly develop new capabilities with their existing base – all under the banner of their brand.
  2. Becoming a cloud organisation without the skill set or infrastructure
    Storage, power, capacity, racks, day-to-day support, 99.99 percent uptime, expertise in compliance and attestations – these are just some of the requirements of the cloud. Service providers are likely focused on the needs of customers in their unique technology environment or on specific solutions the service organisation provides, not on the infrastructure they run on. A white-label cloud offering enables service providers to offer a full solution to their customers without shifting focus – not to mention spending – to cloud expertise.
  3. Cementing the position as a trusted adviser
    A white-label cloud partner doesn’t stop at powering the cloud platform for the service provider’s brand. The partner should also help educate team members about the benefits of the cloud and provide them with the training they need to offer recommendations to their customers. When a team is knowledgeable and can provide insights related to non-proprietary solutions, the organisation takes on the role of a consultant and is perceived as more valuable to the customer.
  4. Driving additional value for customers
    The cloud can bring value-added services to the table. Integration, help desk, reporting, migration and managed services are merely a short list of where profitability lies. A white-label partner helps service providers get to market with unique services for their customers that drive additional value.
  5. Launching into the world of consumption-based revenue that drives a long-term run rate
    The world of monthly recurring revenue (MRR), or the movement of capital expenditures to the operational line for a customer, is the new reality – and there is an expectation that their partners will run the business the same way. If service providers aren’t building a long-term run rate business, then the market will likely pass them by.

There’s no question that having the ability to put their name and logo on the products and services they sell is a huge advantage for service providers over typical business owners. In the world of the cloud, the white-label model enables them to drive the transformation of their business by naturally growing and extending existing business. As the five reasons outlined above suggest, it’s an effective and profitable model for helping a business get to the cloud.

Rochelle Coleman is director, partner strategy & marketing at Concerto

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